Company enjoys strong first-quarter performance
Mortgage-backed security investment firm Ellington Financial has reported a solid performance for the first quarter of 2021, thanks to its CMBS, CLO, and non-QM loan businesses.
In its latest financial results release, the investor revealed a net income of $37.9 million, or $0.86 per common share for the three months ended March 31, 2021 – driven by strong growth across its three business lines and lower financing costs.
Ellington has increased the combined size of its small-balance commercial mortgage, residential transition, and consumer loan portfolios by a considerable 21%. The company also posted gains in its CMBS and CLO portfolios.
“In the first quarter, Ellington Financial’s core earnings and book value increased substantially, as we used our strong balance sheet to drive the growth of our high-yielding loan portfolios and opportunistically rotate capital allocations,” said Laurence Penn, CEO and president. “In addition to substantial gains in our CMBS and CLO portfolios, we also had notably strong performance from our non-QM loan business, where we successfully completed our first securitization of the new year, as well as from our consumer loan, residential transition loan, and non-agency RMBS portfolios.”
Sequentially, Ellington’s core earnings per share grew by 16% to $0.43, generating an annualized economic return of 21.3%.
“With the growth of our loan portfolios and core earnings, we were well-positioned for a substantial dividend increase. Last month, the board increased our monthly dividend by 40% to $0.14 per share, which was our third dividend increase in the last year,” Penn said. “Given the earnings power of our current portfolio, including the significant contribution from our equity stakes in originators, along with additional dry powder to deploy, we remain confident that we can continue to grow the dividend from here.”
